SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

[ x ]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
          ACT OF 1934

For the quarterly period ended June 30, 2000


[  ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934

For the transition period from ___________________ to ___________________


                        Commission file number: 000-24933

                             HERITAGE BANCORP, INC.
                  (Name of Small Business Issue in its Charter)


         VIRGINIA                                        54-1914902
------------------------------------        ------------------------------------
    (State or Other Jurisdiction            (I.R.S. Employer Identification No.)
  Of Incorporation or Organization)


                1313 DOLLEY MADISON BLVD., MCLEAN, VIRGINIA 22101
                    (Address of Principal Executive Offices)

                                 (703) 356-6060
                (Issuer's Telephone Number, Including Area Code)

--------------------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal Year,
                          If Changed Since Last Report)



Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes X . No ___.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of June 30, 2000.

            Common stock, $1 par value--2,294,617 shares outstanding
--------------------------------------------------------------------------------

<PAGE>



                                      INDEX

Part I.   Financial Information

Page No.

   Item 1.  Financial Statements
            Consolidated Balance Sheets--
              June 30, 2000 and December 31, 1999                        3

            Consolidated Statements of Income--
              Three and six months ended June 30, 2000 and 1999          4

            Consolidated Statements of Stockholders' Equity--
              Six months ended June 30, 2000 and 1999                    5

            Consolidated Statements of Cash Flows--
              Six months ended June 30, 2000 and 1999                    6

            Notes to Consolidated Financial Statements                   7 - 9

   Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations                        10 - 14

Part II.  Other Information:                                             14 - 15

    Item 1.  Legal Proceedings
    Item 2.  Changes in Securities
    Item 3.  Defaults Upon Senior Securities

    Item 4.  Submission of Matters to a Vote of Security Holders
    Item 5.  Other Information
    Item 6.  Exhibits and Reports on Form 8-K


                                       2


<PAGE>



                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                      HERITAGE BANCORP, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                            (in thousands of dollars)

<TABLE>
<CAPTION>

                                                              (Unaudited)          (Audited)
                                                               June 30,           December 31,
    ASSETS:                                                      2000                1999
                                                          ----------------      ------------
<S>                                                        <C>                   <C>
    Cash and due from banks                                $     3,362           $     2,667
    Securities available for sale (at market value)             23,688                24,054
    Loans, net                                                  36,901                31,268
    Premises and equipment                                         912                   849
    Other assets                                                 1,213                 1,101
                                                          ------------          ------------
          Total assets                                      $   66,076            $   59,939
                                                            ==========            ==========

LIABILITIES:

Deposits

    Non-interest bearing                                     $  13,736             $  13,708
    Interest-bearing                                            37,248                34,285
                                                            ----------             ---------
       Total deposits                                           50,984                47,993
Short-term debt                                                  6,309                 3,001
Other liabilities                                                  315                   347
                                                          ------------           -----------
          Total liabilities                                     57,608                51,341
                                                            ----------             ---------

STOCKHOLDERS' EQUITY:
    Common stock; $1 par value per share;
     authorized 10,000,000 shares; issued and
     outstanding 2,294,617 shares                                2,295                 2,295
    Surplus                                                      6,530                 6,530
    Undivided profits                                              146                   210
    Accumulated other comprehensive
     income (loss), net                                          (503)                 (437)
                                                            ----------          ------------
          Total stockholders' equity                             8,468                 8,598
                                                            ----------           -----------
          Total liabilities and
            stockholders' equity                             $  66,076             $  59,939
                                                             =========             =========
</TABLE>


Notes to financial statements are an integral part of these statements.


                                       3


<PAGE>


                      HERITAGE BANCORP, INC. AND SUBSIDIARY
                        CONSOLIDATED STATEMENTS OF INCOME
                            (in thousands of dollars)
                                   (unaudited)
<TABLE>
<CAPTION>

                                       Three Months Ended                  Six Months Ended
                                       ------------------                  ----------------
                                                 June 30,                  June 30,
                                                 -------                   --------
<S>                                 <C>              <C>               <C>              <C>
                                      2000             1999              2000              1999
                                      ----           ------              ----             ------
INTEREST INCOME:
Loans and fees                      $   791          $  692            $ 1,516          $  1,391
Federal funds sold                        9              64                 16               145
Investment securities                   392             356                778               675
                                    -------          -------           --------          -------
   Total interest income              1,192           1,112              2,310             2,211

INTEREST EXPENSE:
Interest on deposits                    371             343                701               691
Interest on federal funds purchased
 and other borrowings                    59              23                103                35
                                     -------           ------          ---------         -------
   Total interest expense               430             366                804               726
                                     ------            -----           ---------          ------
   Net interest income                  762              746              1,506            1,485

PROVISION FOR LOAN
AND LEASE LOSSES                        (64)               6                (92)              13
                                    --------            ------         ----------        -------
   Net interest income after            826              740              1,598            1,472
   provision for loan losses

OTHER INCOME:
Service charges & fees                     40               37                 86                71
Securities gains (losses)                   0                1                (13)                1
                                     ---------          -------        -----------      -----------
   Total other income                      40               38                 73                72

OTHER EXPENSES:
Salaries & employee benefits             342               354              661                649
Occupancy expenses                       119                85              224                162
Furniture & equipment expenses            60                21              124                 35
Other operating expenses                 479               289              759                473
                                     -------          --------         ---------          --------
   Total other expenses                1,000               749            1,768              1,319
                                     -------          --------         ---------          --------
Income (loss) before income taxes       (134)               29              (97)               225
Applicable income taxes (benefit)        (45)               14              (33)                33
                                     ---------       ----------        ----------         --------
   Net income (loss)                 $   (89)        $      15         $    (64)            $  192
                                     ========        =========         =========            ======

    EARNINGS PER SHARE, BASIC        $ (0.04)        $    0.01         $  (0.03)            $ 0.08
                                     ========        =========         =========            ======
    EARNINGS PER SHARE, ASSUMING
    DILUTION                         $ (0.04)        $    0.01         $  (0.03)            $ 0.08
                                     ========        =========         =========            ======

</TABLE>

Notes to financial statements are an integral part of these statements.


                                       4


<PAGE>




                      HERITAGE BANCORP, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 For the six months ended June 30, 2000 and 1999
                            (in thousands of dollars)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                   Accumulated
                                                                                      Other
                                                 Common               Retained    Comprehensive     Comprehensive
                                                 Stock     Surplus    Earnings     Income(loss)      Income (loss)        Total
                                                 -----     -------    --------     ------------      -------------       -------
<S>                                           <C>         <C>      <C>            <C>            <C>                 <C>
Balance, January 1, 1999                       $ 2,295     $ 6,530  $       28     $     75                              $8,928
Comprehensive income:
   Net income                                        -           -         192            -        $         192            192
   Other comprehensive income:
     Unrealized holding gains (losses) on
     securities available for sale arising
     during the period net of tax of $(124)          -           -           -         (314)                (314)          (314)
                                                                                                           -----
   Other comprehensive income, net of tax            -           -           -            -                    -
                                                                                                      ----------
   Total comprehensive income                        -           -            -           -         $       (122)             -
                                               -------    --------      -------      ------         ============        -------
Balance, June 30, 1999                          $2,295     $ 6,530      $  220      $ ( 239)                             $8,806
                                                ======     =======      =========    =======                              ======



Balance, January 1, 2000                       $ 2,295     $ 6,530  $      210      $ (437)                              $8,598
Comprehensive income:
   Net income (loss)                                 -           -         (64)           -         $       (64)            (64)
   Other comprehensive income:
     Unrealized holding gains (losses) on
     securities available for sale arising
     during the period net of tax of $(34)           -           -           -         (66)                 (66)            (66)
                                                                                                            ----
   Other comprehensive income, net of tax            -           -           -            -                    -              -
                                                                                                      ----------
   Total comprehensive income                        -           -           -            -        $       (130)              -
                                               -------    --------    --------       ------        =============         -------
Balance, June 30, 2000                          $2,295     $ 6,530    $     146     $ (503)                              $8,468
                                                ======     =======    =========     =======                              ======

</TABLE>

Notes to financial statements are an integral part of these statements.


                                       5


<PAGE>


                      HERITAGE BANCORP, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                 Six  Months  Ended
                                                                                     June 30,
                                                                                 2000           1999
                                                                                -----           ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                        <C>            <C>
   Net income                                                              $     (64)     $     192
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation and amortization                                                 50            33
     Provision for loan losses                                                    (92)           13
     Amortization of premiums, net                                                  9            15
     (Gain) loss on sale of securities available for sale                          13            (1)
     Changes in assets and liabilities:
       Decrease (increase) in other assets                                        (43)           36
       (Decrease) in other liabilities                                            (32)          (26)
                                                                           ----------  ------------
          Net cash (used in ) operating activities                               (159)          262
                                                                            ---------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Net increase in loans                                                      (5,540)         (366)
   Purchase of securities available for sale                                    (813)      (11,552)
   Proceeds from sales of securities available for sale                          987            646
   Proceeds from calls and maturities of securities available for sale            73          7,249
   Purchase of premises and equipment                                           (152)          (496)
                                                                          -----------   -----------
          Net cash used in investing activities                               (5,445)        (4,519)
                                                                           ----------    ----------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Increase (decrease) in deposits                                             2,991         (4,571)
   Net increase in short-term borrowings                                       3,308            308
                                                                          -----------  ------------
          Net cash provided by financing activities                            6,299         (4,263)
                                                                          -----------   -----------
            Net increase (decrease) in cash and cash equivalents                 695         (8,520)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                 2,667        14,375
                                                                           ----------    ----------
CASH AND CASH EQUIVALENTS - END OF PERIOD                                   $   3,362    $    5,855
                                                                            =========    ==========

Supplemental disclosures of cash flow information Cash payments for:

     Interest on deposits                                                   $    700     $     690
     Income taxes                                                           $      -     $       -

Supplemental schedule of non-cash investing activities
   Unrealized gain (loss) on securities available for sale                  $   (761)    $    (363)


</TABLE>


Notes to financial statements are an integral part of these statements.


                                       6


<PAGE>



                      HERITAGE BANCORP, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.    General

         The consolidated  statements  include the accounts of Heritage Bancorp,
      Inc. (the "Company") and its  subsidiary,  The Heritage Bank (the "Bank").
      All  significant   intercompany   balances  and  transactions   have  been
      eliminated.  In the  opinion of  management,  the  accompanying  unaudited
      consolidated  financial statements contain all adjustments  (consisting of
      only normal recurring  accruals) necessary to present fairly the financial
      positions as of June 30, 2000 and  December  31, 1999,  and the results of
      operations and cash flows for the six months ended June 30, 2000 and 1999.

         The results of  operations  for the six months  ended June 30, 2000 and
      1999 are not necessarily  indicative of the results to be expected for the
      full year.

2.    Investment Securities

         Amortized cost and carrying amount (estimated fair value) of securities
      available for sale are summarized as follows:

<TABLE>
<CAPTION>

                                                                        June 30, 2000
                                                   --------------------------------------------------
                                                                    Gross          Gross    Estimated
                                                   Amortized   Unrealized     Unrealized       Market
           (In thousands of dollars)                    Cost       Gains         Losses         Value
                                                   --------------------------------------------------
<S>                                                <C>          <C>             <C>         <C>
     US government agencies & corporations         $ 23,074     $       -       $  (763)    $ 22,311
     Obligations of states & political subdivisions     510             -            (2)         508
     Corporate debt obligations                         500             4              -         504
     Other securities                                   100             -              -         100
     Federal reserve stock                              265             -              -         265
                                                  ---------     ---------     ----------   ---------
                                                   $ 24,449      $      4        $ (765)    $ 23,688
                                                   ========      ========        =======    ========


    Securities available for sale at December 31, 1999 consist of the following:

                                                                      December 31, 1999
                                                   --------------------------------------------------
                                                                    Gross          Gross    Estimated
                                                   Amortized   Unrealized     Unrealized       Market
    (in thousands of dollars)                           Cost        Gains         Losses        Value
                                                 ----------------------------------------------------
    US government & federal agencies              $  22,916    $        -     $    (643)    $ 22,273
    Obligations of states & political subdivisions    1,010             -            (4)       1,006
    Corporate debt obligations                          525             -           (15)         510
    Federal reserve stock                               265             -              -         265
                                               ------------   -----------    -----------  ----------
                                                  $  24,716    $        -        $ (662)    $ 24,054
                                                  =========    ==========        =======    ========



                                                                 Six Months Ended
                                                              (in thousands of dollars)
                                                                      June 30,
                                                                     2000             1999
                                                                ---------          -------
    Gross proceeds from sales of securities                           987              646
                                                                =========          =======
    Gross gains on sale of securities                                   -                1
    Gross losses on sale of securities                                 13                -
                                                                ---------          -------
      Net securities gains/losses                                      13                1
                                                                =========          =======

</TABLE>
                                       7


<PAGE>


              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                   (unaudited)

3.       LOANS

         Major classifications of loans are as follows:

 (in thousands of dollars)
                                             June 30,           December 31,
                                               2000                 1999
                                            ---------           ------------
Commercial                                  $  5,894             $  3,665
Real estate:
   Construction                                1,838                1,157
   Residential (1-4 family)                   11,214               10,475
   Commercial                                 15,331               13,088
   Agricultural                                  962                  972
Consumer                                       1,262                1,507
All other Loans                                  729                  825
                                          ----------           ----------
                                              37,230               31,689
Less allowance for loan losses                 (329)                (421)
                                          ----------           ----------
                                           $ 36,901               $31,268
                                           =========              =======

The  following  schedule  summarizes  the changes in the  allowance for loan and
lease losses:


                                   Six Months        Six Months
                                     Ending           Ending        December 31,
                                   June 30, 2000   June 30, 1999       1999
(in thousands of dollars)             ---------      ---------       ----------
Balance, beginning                     $   421       $     429         $    429
Provision charged against income           (92)             13                -
Recoveries                                   5               9               12
Loans charged off                            5              20               20
                                      --------        --------         --------
Balance, ending                        $   329       $     431        $     421
                                       =======        ========         ========

There were no nonperforming assets on June 30, 2000 or on December 31, 1999.

There were no loans past due 90 days or more and still accruing on June 30, 2000
or on December 31, 1999.

4.       EARNINGS PER SHARE


    The following shows the weighted  average number of shares used in computing
earnings  per  share  and the  effect on  weighted  average  number of shares of
diluted potential common stock income available to common shareholders.

<TABLE>
<CAPTION>

                                                        June 30, 2000                       June 30, 1999
                                                        -------------                       -------------
                                                                   Per Share                        Per Share
                                                    Shares          Amount               Shares        Amount
                                                    ------         ---------             ------     ---------
<S>                                             <C>             <C>                  <C>         <C>
Basic Earnings Per Share                         2,294,617          $ (0.03)           2,294,617       $   .08

Effect of dilutive securities:
  Nonemployee directors' stock options              10,000                               10,000
  Employee incentive stock options                  21,544                               44,050
                                               -----------                          -----------

Diluted Earnings Per Share                       2,424,907          $ (0.03)          2,348,667        $   .08
                                                 =========          --------          =========        =======
</TABLE>

                                        8

<PAGE>

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

                                   (unaudited)

5.       CAPITAL REQUIREMENTS

A  comparison  of the  Company's  capital as of June 30,  2000 with the  minimum
requirements is presented below:

                                                                 Minimum
                                       Actual                  Requirements
                                       ------                  ------------
Tier I risk-based capital              22.41%                      4.00  %
Total risk-based capital               23.23%                      8.00  %
Leverage ratio                         14.29%                      4.00  %


                                       9

<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

FORWARD-LOOKING STATEMENTS

    Certain    information    contained   in   this   discussion   may   include
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements are generally identified by phrases
such as "the  Company  expects,"  "the  Company  believes"  or words of  similar
import.  Such  forward-looking   statements  involve  known  and  unknown  risks
including,  but not  limited  to,  changes  in  general  economic  and  business
conditions, interest rate fluctuations,  competition within and from outside the
banking  industry,  new  products  and  services in the banking  industry,  risk
inherent in making  loans such as  repayment  risks and  fluctuating  collateral
values,  problems with  technology  utilized by the Company,  changing trends in
customer profiles and changes in laws and regulations applicable to the Company.
Although  the  Company  believes  that  its  expectations  with  respect  to the
forward-looking statements are based upon reliable assumptions within the bounds
of its knowledge of its business and operations,  there can be no assurance that
actual  results,  performance  or  achievements  of the Company  will not differ
materially  from any future results,  performance or  achievements  expressed or
implied by such forward-looking statements.

GENERAL

    The  following  presents   management's   discussion  and  analysis  of  the
consolidated  financial condition and results of operations of Heritage Bancorp,
Inc.  (the  "Company")  as of the  dates  and for the  periods  indicated.  This
discussion  should  be read  in  conjunction  with  the  Company's  Consolidated
Financial  Statements and the Notes thereto,  and other financial data appearing
elsewhere in this report. The Company is the parent bank holding company for The
Heritage Bank (the "Bank").  The Bank is a Virginia chartered bank headquartered
in McLean,  Virginia that  currently  operates  three  full-service  offices and
engages in a broad range of lending and deposit services aimed at individual and
small to medium-sized business customers in their respective market areas.

PROPOSED MERGER

         The Boards of Directors of Cardinal Financial  Corporation and Heritage
Bancorp,  Inc. have agreed to merge the two companies pursuant to an amended and
restated  agreement and plan of  reorganization,  dated June 19, 2000. After the
merger,  Cardinal Financial  Corporation will own four banks with expected total
assets of  approximately  $180,000,000  and seven  branch  offices  in  northern
Virginia.

         The shareholders of both  corporations  approved the proposed merger at
special  meetings of  shareholders  of both  corporations  on July 25, 2000.  If
regulatory  approvals  received,  the Bank will become a subsidiary  of Cardinal
Financial  Corporation  and  most  likely  change  its name to  Cardinal  Bank -
Potomac.  The  Company's  shareholders  will  receive  $6.00 in cash,  shares of
preferred  stock with a per share  value of  approximately  $6.00 per share or a
combination  of both for each  share of  Heritage  common  stock  that they own.
Cardinal  Financial  Corporation  has applied to list the preferred stock on the
Nasdaq SmallCap Market.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2000 AND DECEMBER 31, 1999.

         As of June 30, 2000 the  Company's  total  assets were  $66,076,000  as
compared to $59,939,000 as of December 31, 1999, which represents an increase of
10.2%.  The 2000 increase in total assets of $6,137,000 was primarily due to the
increased loan production efforts.  Total loans increased by 17.5% or $5,541,000
to $37,230,000 at June 30, 2000 from $31,689,000 at December 31, 1999.

         Total deposits increased  $2,991,000 to $50,984,000 at June 30, 2000 as
compared to $47,993,000 at December 31, 1999. The largest deposit increases were
in certificates  of deposits and interest  bearing demand  accounts.  Repurchase
agreements  at June 30,  2000  were  $3,174,000  or  $173,000  greater  than the
December 31, 1999 balance of $3,001,000. The Bank also had $3,135,000 in federal
funds purchased at June 30, 2000 compared to none at December 31, 1999.

                                       10

<PAGE>

         Federal funds sold and cash and due from banks  represent the Company's
cash and cash  equivalents.  Federal funds sold and cash and cash due from banks
at June 30, 2000 totaled $3,362,000 compared to $2,667,000 at December 31, 1999,
representing an increase of $695,000,  or 26.1%.  The increase in due from banks
was  attributable  to usual  fluctuations  in  clearing  balances at the Federal
Reserve Bank.

         Securities available for sale decreased $366,000 or 1.5% to $23,688,000
at June 30, 2000 from  $24,054,000  at December 31,  1999.  The net decrease was
primarily  due to the sale of two  securities  for  liquidity in January and the
purchase of one  additional  floating  rate  security  to increase  the yield on
earning assets.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999.

         Net income.  The Company reported a net loss for the three months ended
June 30,  2000 of $89,000 or $(0.04)  basic and  diluted  earnings  per share as
compared to the $15,000 net income or $.01 basic and diluted  earnings per share
for the same period of 1999.  This decrease was primarily due to the $189,000 in
merger related expenses. Prior to these merger expenses, the Bank had net income
for the three months ended June 30, 2000 of $100,000. The increase in net income
without  the  pre-merger  expenses  as  compared  to the same period of 1999 was
primarily  comprised of a credit to provision  for loan losses of $64,000 due to
the continued  improvement in quality of the loan  portfolio,  and increased net
interest income of $16,000.

         Net-interest  income.  Net interest  income is the  difference  between
interest earned on loans, investment securities and short-term investments,  and
the  interest  paid on  deposits,  repurchase  agreements  and other  short-term
borrowings.  Factors affecting net interest income include interest rates earned
on loans and investments  and those paid on deposits and repurchase  agreements,
the mix and volume of earning assets and interest  bearing  liabilities  and the
level of non-earning assets and non-interest bearing  liabilities.  Net interest
income for the quarter  ended June 30, 2000  increased  $16,000 or 2.1% over the
same quarter of 1999.

         Non-interest income.  During the three-month period ended June 30, 2000
non-interest  income increased $2,000 over the same period of 1999. The increase
is primarily due to increased volume of fees on deposit accounts.

         Non-interest  expense.  In the  second  quarter  of  2000  non-interest
expenses  increased  $251,000  or  33.5%  over the  same  period  of 1999 due to
increased  occupancy and equipment costs and operating  expenses.  Occupancy and
equipment  costs  increased due to the Tysons branch,  which opened May of 2000,
and the Sterling branch,  which opened in April of 1999. These additional leases
raised occupancy  expense by $34,000 for the three months ended June 30, 2000 as
compared to the same period of 1999.  Additional equipment expenses increased by
$39,000 for the  three-month  period ended June 30, 2000 as compared to the same
period of 1999. During this same period operation expenses increased by $190,000
as compared to the same period of 1999. This increase was primarily comprised of
the $189,000 in merger related expenses.

         Provision  for loan  losses.  In view of the loan growth for the second
quarter of 1999 and the fact that there was no  deterioration in the Bank's loan
portfolio,  a provision of $6,000 was made for loan losses in the first  quarter
of 1999. The allowance for loan losses at June 30, 1999 was 1.44% of outstanding
loans. In view of the  improvement in the Bank's loan portfolio,  an analysis of
the  reserve for loan losses  indicated  that the  reserves  were  greater  than
required.  Management  determined  that a reserve of .88% would be an acceptable
level.  A credit of $64,000 for the second  quarter was made to the provision to
reduce the reserve balance at June 30, 2000. The level of the allowance for loan
losses is based upon management's  review of the loan portfolio and includes the
present and  prospective  financial  condition of  borrowers,  consideration  of
actual loan loss experience and projected economic conditions in general and for
the Bank's service areas in particular.  Management  believes that the provision
for loan losses and the allowance for loan losses are reasonable and adequate to
cover any known losses and any losses  reasonably  expected in the existing loan
portfolio.  While  management  estimates  loan losses  using the best  available
information,  such as independent appraisals on collateral,  no assurance can be
given that future  additions to the  allowance  will not be  necessary  based on
changes in  economic  and real estate  market  conditions,  further  information
obtained  regarding known problem loans,  identification  of additional  problem
loans and other factors, both within and outside management's control.

                                       11

<PAGE>

         Income Taxes. The Company recognized a net income tax credit of $45,000
in the second  quarter of 2000, as compared to an expense of $14,000 in the same
period  of  1999.  A net  operating  loss  carryforward  of the  Company  became
completely utilized for accounting purposes in 1999.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999.

         Net income.  The Company  reported a net loss for the six months  ended
June 30,  2000 of $64,000 or $(0.03)  basic and  diluted  earnings  per share as
compared to the $192,000 net income or $.01 basic and diluted earnings per share
for the same period of 1999.  This  $256,000  decrease was  primarily due to the
$189,000 in merger related expenses. Prior to these merger expenses the Bank had
net income for the six months ended June 30, 2000 of  $125,000.  The decrease in
net income  without  merger  expenses as compared to the same period of 1999 was
primarily  comprised of increased  occupancy and equipment costs and operational
expenses.

         Net-interest  income.  Net interest  income is the  difference  between
interest earned on loans, investment securities and short-term investments,  and
the interest paid on deposits and repurchase  agreements.  Factors affecting net
interest income include interest rates earned on loans and investments and those
paid on deposits and repurchase agreements, the mix and volume of earning assets
and  interest  bearing  liabilities  and the  level of  non-earning  assets  and
non-interest bearing  liabilities.  Net interest income for the six-month period
ended June 30, 2000 increased $21,000 or 1.4% over the same quarter of 1999.

         Non-interest  income.  During the six-month  period ended June 30, 2000
non-interest  income  increased  $1,000 over the same period of 1999.  A loss on
sale of securities of $13,000 was partially offset by increases in overdraft and
return check charges,  and other  commission  fees such as ATM fees and merchant
discount  fees.  The  securities  were sold to provide some  liquidity  for loan
funding.

         Non-interest  expense.  In the  first six  months of 2000  non-interest
expenses  increased  $449,000  or 34.0%  over the same  period  of 1999.  Merger
expenses represent $189,000 of this increase.  Occupancy and equipment costs and
operational  expenses  increased  due to the Tysons  branch  which opened May of
2000,  the Sterling  branch which opened in April of 1999 and  additional  space
rented for  operational  expansion at the Main office  address in March of 1999.
These additional  leases raised occupancy  expense by $62,000 for the six months
ended June 30, 2000 as compared to the same period of 1999.  Equipment  expenses
increased by $89,000 primarily due to the additional  facilities,  and partially
due to the Company's upgrade of its computer systems.  Data processing increased
by $37,000  during this six month  period as compared to the same period of 1999
and marketing and business development increased by $37,000.

         Provision for loan losses. In view of the loan growth for the first six
months of 1999 and the fact that there was no  deterioration  in the Bank's loan
portfolio,  a provision of $13,000 was made for loan losses in the first half of
1999.  The allowance  for loan losses at June 30, 1999 was 1.44% of  outstanding
loans. In view of the  improvement in the Bank's loan portfolio,  an analysis of
the  reserve for loan losses  indicated  that the  reserves  were  greater  than
required.  Management  determined  that a reserve of .88% would be an acceptable
level.  A credit of $92,000 for the first half of 2000 was made to the provision
to reduce the reserve  balance at June 30, 2000.  The level of the allowance for
loan losses is based upon management's review of the loan portfolio and includes
the present and prospective  financial condition of borrowers,  consideration of
actual loan loss experience and projected economic conditions in general and for
the Bank's service areas in particular.  Management  believes that the provision
for loan losses and the allowance for loan losses are reasonable and adequate to
cover any known losses and any losses  reasonably  expected in the existing loan
portfolio.  While  management  estimates  loan losses  using the best  available
information,  such as independent appraisals on collateral,  no assurance can be
given that future  additions to the  allowance  will not be  necessary  based on
changes in  economic  and real estate  market  conditions,  further  information
obtained  regarding known problem loans,  identification  of additional  problem
loans and other factors, both within and outside management's control.

         Income Taxes. The Company recognized a net income tax credit of $33,000
in the first  half of 2000,  as  compared  to an  expense of $33,000 in the same
period  of  1999.  A net  operating  loss  carryforward  of the  Company  became
completely utilized for accounting purposes in 1999.

                                       12

<PAGE>

LOAN QUALITY

         The  Bank  attempts  to  manage  the risk  characteristics  of its loan
portfolio  through  various  control  processes,  such as credit  evaluation  of
borrowers,   establishment   of  lending  limits  and   application  of  lending
procedures,  including the holding of adequate collateral and the maintenance of
compensating  balances.  However,  the Bank seeks to rely  primarily on the cash
flow of its borrowers as the  principal  source of  repayment.  Although  credit
policies are designed to minimize risk,  management  recognizes that loan losses
will occur and that the amount of these losses will  fluctuate  depending on the
risk  characteristics  of the loan  portfolio,  as well as general and  regional
economic conditions.

         The allowance for loan losses represents a reserve for potential losses
in the  loan  portfolio.  The  adequacy  of the  allowance  for loan  losses  is
evaluated  periodically  based  on a review  of all  significant  loans,  with a
particular  emphasis on  non-accruing,  past due and other loans that management
believes  require  special  attention.  As of June 30, 2000,  the Company had no
loans in  non-accrual or 90 days past due as compared to $129,000 in non-accrual
or 90 days past due as of June 30, 1999.

         For  significant   problem  loans,   management's  review  consists  of
evaluation of the financial  strengths of the borrower,  the related collateral,
and the effects of economic conditions.  Specific reserves against the remaining
loan  portfolio  are based on  analysis of  historical  loan loss  ratios,  loan
charge-offs,  delinquency trends, and previous collection experience, along with
an assessment of the effects of external economic conditions.

         As of June  30,  2000,  the  allowance  for  loan  losses  was  .88% of
outstanding  loans,  which was a decrease  from the June 30, 1999  percentage of
1.44%.  Management's judgment as to the level of future losses on existing loans
is based on management's  internal  review of the loan  portfolio,  including an
analysis of the borrowers'  current  financial  position,  the  consideration of
current and  anticipated  economic  conditions  and their  potential  effects on
specific  borrowers,  an evaluation of the existing  relationships  among loans,
potential  loan losses,  and the present level of the loan loss  allowance;  and
results  of  examinations  by  independent   consultants.   In  determining  the
collectibility of certain loans, management also considers the fair value of any
underlying collateral.  However,  management's  determination of the appropriate
allowance level is based upon a number of assumptions about future events, which
are believed to be reasonable, but which may or may not prove valid. Thus, there
can be no  assurance  that  charge-offs  in future  periods  will not exceed the
allowance for loan loss or that additional  increases in the loan loss allowance
will not be required.

CAPITAL RESOURCES

         Stockholders'  equity was $8,468,000 as of June 30, 2000 as compared to
$8,598,000  as of  December  31,  1999.  The  $130,000  decrease,  or 1.5%,  was
partially  due to a  $66,000  increase  in the  unrealized  loss  on  investment
securities  available-for-sale  and the  year to date net  loss of  $64,000.  No
dividends have been declared by the Company since its inception. In addition, no
options under the Stock Option Plan have been exercised during 2000.

         Under the Federal  Reserve's  capital  regulations,  for as long as the
Company's  assets are under  $150  million,  the  Company's  capital  ratios are
reviewed  on  a  bank-only   basis.  The  Bank  exceeded  its  capital  adequacy
requirements as of June 30, 2000 and December 31, 1999. The Company  continually
monitors its capital  adequacy ratios to assure that the Bank remains within the
guidelines.

                                       13

<PAGE>


LIQUIDITY AND INTEREST RATE SENSITIVITY

         The primary  objective of  asset/liability  management is to ensure the
steady growth of the Company's primary earnings component,  net interest income.
Net interest income can fluctuate with significant  interest rate movements.  To
lessen the impact of these rate swings,  management  endeavors to structure  the
balance  sheet  so that  repricing  opportunities  exist  for  both  assets  and
liabilities  in  roughly  equivalent  amounts  at  approximately  the same  time
intervals.  Imbalances  in these  repricing  opportunities  at any point in time
constitute interest rate sensitivity.

         The measurement of the Company's  interest rate sensitivity,  or "gap,"
is  one  of  the  principal  techniques  used  in  asset/liability   management.
Interest-sensitive  gap is the dollar difference  between assets and liabilities
that  are  subject  to  interest-rate  repricing  within  a given  time  period,
including  both floating rate or adjustable  rate  instruments  and  instruments
which are approaching maturity.

         In theory, maintaining a nominal level of interest rate sensitivity can
diminish interest rate risk. In practice,  this is made difficult by a number of
factors,  including  cyclical  variations in loan demand,  different  impacts on
interest-sensitive  assets and liabilities  when interest rates change,  and the
availability of funding sources.  Accordingly,  the Company undertakes to manage
the interest-rate  sensitivity gap by adjusting the maturity of and establishing
rate  prices  on  the  earning  asset  portfolio  and  certain  interest-bearing
liabilities to keep it in line with management's expectations relative to market
interest  rates.  Management  generally  attempts to maintain a balance  between
rate-sensitive  assets and  liabilities as the exposure  period is lengthened to
minimize the overall interest rate risk to the Company.

         The  Bank's  Executive  Committee  that  oversees  the  asset/liability
management  function meets  periodically  to monitor and manage the structure of
the  balance  sheet,  control  interest  rate  exposure,  and  evaluate  pricing
strategies  for the Company.  The asset mix of the balance sheet is  continually
evaluated in terms of several variables:  yield, credit quality, and appropriate
funding  sources and  liquidity.  Management of the liability mix of the balance
sheet focuses on expanding the various funding sources.

         Securities maintained in the  available-for-sale  portfolio may be sold
prior to maturity  in order to provide  the Company and the Bank with  increased
liquidity.  Available-for-sale  investment  securities  totaled  $23,688,000 and
$24,054,000 as of June 30, 2000 and December 31, 1999, respectively.

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings - None

Item 2.  Changes in Securities - None

Item 3.  Defaults Upon Senior Securities - None

Item 4.  Submission of Matters to a Vote of Security Holders - None

Item 5.  Other Information - Definitive Merger Agreement

         On July 25, 2000, the Company's  shareholders  approved the Amended and
Restated Agreement and Plan of Reorganization  dated June 19, 2000 providing for
the merger of the Company with Cardinal Financial  Corporation  ("Cardinal"),  a
bank holding company headquartered in Fairfax,  Virginia. Under the terms of the
merger  agreement,  Cardinal  will  issue a  combination  of cash and  shares of
convertible preferred stock to the Company's stockholders in exchange for all of
the shares of the Company's common stock.

         The  Company's  stockholders  will be able to elect to receive $6.00 in
cash, 1.2 shares of convertible  preferred  stock,  or a combination of both for
each share of the Company's  common  stock,  subject to certain  adjustments  to
permit  Cardinal  to issue an equal  amount  of cash and  convertible  preferred
stock. The preferred stock will have a

                                       14

<PAGE>

liquidation  value of $5.00 and the right to  dividend  payments  at the rate of
7.25% per annum.  Each share of preferred  stock will also be  convertible  into
shares of Cardinal's common stock at any time at the option of its holder.

         It is expected that The Heritage Bank will be renamed  "Cardinal Bank -
Potomac"  and become a  subsidiary  of Cardinal,  the  surviving  company in the
merger.  Following the merger, three members of the Company's Board of Directors
will join Cardinal's Board.  Subject to certain conditions  including receipt of
regulatory  approval,  the closing of the merger is  anticipated to occur in the
third  quarter of 2000.  The merger  will be  accounted  for under the  purchase
method.

Item 6.  Exhibits and reports on Form 8-K

            a)       Exhibits

                     27      Financial Data Schedule (filed electronically only)

            b)       Form 8-K - None

                                       15

<PAGE>




                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Date:  August 14, 2000              BY       /s/      Terrie G. Spiro
                                      -------------------------------
                                                      President & CEO

Date:  August 14, 2000              BY       /s/      Janet A. Valentine
                                      ----------------------------------
                                                     Exec. Vice President
                                                     & Chief Financial Officer

                                       16